Broker: Maybank Kim Eng Research
Date of Report: July 21, 2025

Thai Beverage PCL: Navigating Maturity, Macro Challenges, and IPO Opportunities in Southeast Asia’s Beverage Market

Introduction: Thai Beverage PCL at a Crossroads

Thai Beverage Public Company Limited (ThaiBev), Southeast Asia’s leading alcohol beverage producer and a formidable beer maker in Vietnam, is at a pivotal stage. While the company maintains dominant market positions, growth is capped by market maturity in core countries, macroeconomic softness, and regulatory tightening. This comprehensive analysis explores ThaiBev’s current performance, segmental outlooks, financial standing, and potential value-unlocking catalysts such as planned IPOs.

Company Overview: Market Leadership & Business Model

• Largest alcohol beverage producer in Thailand with 80–90% spirits market share.
• Leading beer maker in Vietnam via 54% owned SABECO, with a 43% beer market share.
• Vertically integrated operations across Thailand and Vietnam, including 19 distilleries, 3 breweries, and 20 non-alcoholic beverage (NAB) facilities.
• Diverse portfolio: spirits, beer, non-alcoholic beverages, and food.
• Key brands: Chang beer, Ruang Khao, Grand Royal whisky, Bia Saigon, 100PLUS, Oishi, F&N dairy, and Oishi restaurants and KFC outlets in Thailand.

Share Price and Valuation Snapshot

• Share price: SGD 0.48
• 12-month price target (TP): SGD 0.45 (HOLD rating)
• Market capitalization: SGD 11.9 billion (USD 9.3 billion)
• Free float: 45.2%
• Major shareholders: Sirivadhanabhakdi Family, MM Group Ltd., The Vanguard Group, Inc.

Key Financials (THB m)

Investment Thesis: Limited Growth, Discounted Valuation

• Initiated with a HOLD rating; TP of SGD 0.45.
• Core earnings projected to post a 3% CAGR over FY24–27.
• Revenue growth capped at 2% CAGR FY25–27 amid high market penetration, economic headwinds, and regulatory risks.
• Stock trades at 11x FY25E P/E, about 1 standard deviation below historical mean—a discount justified by slow growth.
• Optional upside from potential IPOs of BeerCo and F&B Co, but timing is uncertain.

Alcohol Segments: Mature Markets, Subdued Volume Growth

High Market Penetration Limits Upside

• Per capita alcohol intake in Thailand and Vietnam is 2–10x higher than other emerging Asian markets.
• Stringent regulations: Thailand’s alcohol control laws restrict sales hours and advertising; Vietnam is increasing consumption taxes and enforcing strict DUI laws.
• Market share gains constrained by high concentration: 80–90% for ThaiBev spirits in Thailand, 40% beer market share in Thailand, and SABECO is the leader by volume in Vietnam.

Volume and Revenue Projections

• Spirits: Volumes expected to remain flat (1.7% CAGR), reflecting market maturity and regulatory hurdles.
• Beer: Projected to grow at just 3% CAGR FY24–27, with Thailand at 1.7% CAGR—the second slowest in ASEAN.
• Alcohol Revenues: Up only 2% CAGR FY25–27.

Premiumization: Opportunity and Challenge

• ThaiBev and SABECO are targeting premium and craft segments: SABECO launched 333 Pilsner, ThaiBev introduced limited-edition Chang brews and upscale spirits.
• Premiumization faces headwinds from consumer affordability, health trends (especially among Gen Z), and regulatory tightening.
• Premium/Value split: ThaiBev and SABECO remain concentrated in value segments, while the market shifts to premium.

Competitive Landscape

• ThaiBev’s spirits and beer market shares have remained stable (spirits: 79–81%, beer: 36–37%).
• New entrants and aggressive promotions (e.g., Carabao in Thailand, Heineken’s expansion in Vietnam) are squeezing margins.
• In Vietnam, SABECO’s volumes stabilized in 2024 (revenue up 4.6%, profit up 5.6%), but macro risks persist.

Non-Alcoholic Beverages (NAB): Growing but Small Profit Contributor

Segment Overview and Recent Performance

• NAB portfolio: est Cola, Oishi green tea, Crystal water, 100PLUS, and F&N dairy products.
• Full consolidation of F&N (now 69.7% owned), expanding control over dairy and soft drinks.
• FY24 NAB revenue: THB 65.8b (up 4% YoY); net profit up 9% to THB 5.9b.

Growth Prospects and Strategic Initiatives

• NAB revenues and net profit expected to grow at 4% and 6% CAGRs (FY24–27).
• AgriValley project (MYR1.7b investment in Malaysia) targets rising ASEAN milk demand (6% 5Y CAGR), with production launch in 2025.
• Continued innovation in health-focused and low/no-sugar beverages.

Profitability Challenges

• Thin margins in NAB and food segments; profitability inflection expected only by 2HFY26.
• NAB contributed just 11% of group profits in 1HFY25; projected to rise to 15% by FY27.
• Group profit remains heavily skewed to alcoholic segments, limiting the impact of NAB growth.

Potential IPOs: BeerCo and F&B Co as Value Catalysts

BeerCo IPO: Timing and Valuation

• BeerCo IPO has been delayed several times; potential timeline within FY2025 if revived.
• At peer multiples (19x PE), BeerCo could be valued at SGD 3.4b, compared to current implied SGD 2.0–2.7b—a potential 5–12% group-level upside.
• Proceeds would deleverage ThaiBev, reduce interest expenses, and could command a higher group valuation multiple.

F&B Co IPO: Emerging Value Opportunity

• F&B Co would consolidate non-alcoholic beverage and food businesses, targeting a regional listing.
• At 17x PE (peer average), F&B Co could be worth SGD 2.1b, versus an implied group valuation of USD 0.2–0.8b—suggesting a 2–6% upside.
• IPO execution remains speculative, given lack of a concrete timeline or structure.

Financial Performance and Forecasts

• Revenue CAGR (FY25–27): 2%
• EBIT margin stable at ~12%
• Free cash flow yield: 8–10%

Balance Sheet and Cash Flows

• Net debt/EBITDA at ~3x; net debt-to-equity of 0.8x
• High leverage constrains near-term dividend upside; deleveraging prioritized
• Strong operating cashflows sustained by spirits and beer segments

Risks and Sensitivities

• Shifts in consumer preferences towards health and wellness could erode alcohol demand.
• Excise taxes on alcohol are increasing in Thailand (towards 90% by 2031) and Vietnam (towards 100% by 2030).
• Regulatory tightening: further sales hour limits, ad restrictions, and tougher DUI laws.
• Tourism recovery in Thailand could boost on-premise consumption; political unrest remains a risk.
• Production vulnerabilities to natural disasters and water costs; surplus harvests could lower material costs and improve margins.

Peer Comparison: Global Valuations

• ThaiBev trades at a significant discount to global beverage peers, reflecting its softer growth and macro risks.

Conclusion: HOLD Rating with Optional IPO Upside

ThaiBev’s dominant market position is tempered by the realities of high market maturity, regulatory tightening, and macroeconomic headwinds in its core markets. While non-alcoholic beverages and food divisions offer structural growth, their small profit contribution and margin pressures limit their ability to offset softness in alcoholic segments. Potential IPOs of BeerCo and F&B Co represent meaningful, but optional, catalysts for value unlocking. Until there is greater clarity on execution, the core investment case remains defensive—anchored by cash-generative spirits, stable beer operations, and a discounted valuation. Investors should watch for macro improvements, regulatory developments, and concrete progress on IPOs as possible triggers for re-rating.

Appendix: Management Bandwidth

• Thapana Sirivadhanabhakdi: President & CEO since 2008, previously Director and Executive Vice President.
• Prapakon Thongtheppairot: President and Group COO – International; Group CFO.
• Sopon Racharaksa: Executive Vice President; Chief Spirits Product Group.
• Sithichai Chaikriangkrai: Director and Executive Vice President.
• Dr. Pisanu Vichiensanth: Director and Senior Vice President.
• Agapol Na Songkhla: Chief People Officer.

Summary Financial Table: Segment Revenue (THB m)

About Thai Beverage PCL

ThaiBev is a regional beverage powerhouse listed on the Singapore Exchange since 2006, recognized in the Dow Jones Sustainability Indices for leadership in the beverage sector. Its extensive footprint and distribution network span Thailand, Vietnam, Myanmar, Scotland, France, New Zealand, and China, with a reach of over 500,000 points of sale in Thailand alone.

Risks and Considerations for Investors

• Consumer demand shifts toward health-conscious choices.
• Increasing excise taxes and regulatory risk in both spirits and NAB segments.
• Tourism and on-premise sales recovery, political unrest, and natural disasters affecting production.

Final Word

ThaiBev stands as a defensive, cash-generative leader in Southeast Asia’s beverage sector, but growth is constrained by market realities. While optional catalysts exist, the core investment thesis is anchored in stability, not rapid growth. Investors should weigh the defensive qualities against the lack of near-term catalysts and maintain a watchful eye on the execution of value-unlocking IPOs.